:: Australian Dollar: The Aussie dollar began the local session yesterday around the 65 cent mark staring down the barrel of another massive selloff. In early Sydney trading it reached a low near 0.6450, its lowest level in over six weeks. Consumer sentiment as measured by the Westpac-Melbourne Institute came in slightly better than expected for January and with Prime Minister Kevin Rudd yesterday pledging to support the local banks to the tune of 75 billion dollars the local market received a boost in afternoon trade taking the AUD back to 0.6575. In European trade it drifted back to retest 0.6450 which once again held and with U.S equity markets finishing the day in positive territory the Aussie dollar managed to blast through 66 cents and open on its highs at 0.6630 this morning.
- We expect a range today in the AUD/USD rate of 0.6580 to 0.6680
:: Great Britain Pound: After attempting to claw back above the 1.4 mark the Pound Sterling plummeted once again in overnight trade against the Greenback. Plaguing the Sterling at the moment are persistent fears over the stability of the U.K banking system and with offshore investors repatriating funds out of the region the GBP/USD reached 1.3620, its lowest level in more than two decades. In U.K economic data released overnight the unemployment rate increased slightly from 6% to 6.1% with jobless claims only rising slightly and beating expectations. The data was overlooked however with the Bank of England minutes indicating an 8 to 1 vote for a 50 basis point cut with David Blanchflower calling for a full 100 point reduction. A late rebound on equity markets gave the Pound a boost back to 1.3980 as the market awaits more detail from the central bank and government in support of the banking sector. The cross rate revisited Tuesday nights low of 2.0950 in overnight trade, rejecting resistance at 2.1500 in early London exchange.
- We expect a range today in the GBP/AUD rate of 2.0920 to 2.1120
:: New Zealand Dollar: The NZD dropped to a six year low of 0.5165 in early trade yesterday as risk aversion heightened with the global banking system coming under increased scrutiny once again. During the local session however sentiment improved somewhat and the Kiwi retraced back to test resistance at 53 cents. A late rally on the Dow jones improved investors risk appetite and the NZD/USD bounced back to open this morning at 0.5350. Against the Aussie dollar it retested the psychological 0.8 level momentarily exchanging at a low of 0.7993 before bouncing back to 0.8060 this morning.
- We expect a range today in the NZD/USD rate of 0.5280 to 0.5380
:: Majors: After tracking sideways for the majority of the Asian session the big dollar exploded into action last night with a very large option expiry causing USD/JPY to plummet 3 big figures from 90.10 to 87.10 in early U.S exchange. The EUR/JPY cross rate followed suit at one stage losing over 4% to reach a low of 112 whilst EUR/USD managed to hold on to Asian lows of 1.2840 to bounce back and open this morning above 1.2950. In what was a quiet session on the data front direction came from equity markets with the U.S closing 3.5% higher as the market remains confident that the Obama administration will release more funds from the Troubled Assets Relief Program (TARP) to stabilise the banking sector. The positive sentiment helped the USD/JPY bounce back to this morning's open of 89.30 ahead of today's Bank of Japan interest rate announcement with some analysts expecting the central bank to further reduce its official rate to 0.1%.
:: Data Releases:
• AUD: Dec New Motor Vehicle Sales
• NZD: Dec Business performance Manufacturing Index
• USD: Dec Housing Starts & Dec Building Permits
• GBP: No data expected today
• EUR: Nov Industrial New Orders
• JPY: BoJ Rate Announcement
• CAD: Nov Retail Sales & BoC Monetary Policy Report
:: Note: The above exchange rates are based on interbank rates. If you are considering a transfer then please login, register or call us for a live dealing rate.